During Secretary of State Condoleezza Rice´s last visit to
Israel, she devoted special attention to the revival of the 2002
Saudi-inspired Arab peace initiative. As a result, expectations had
been elevated that the Riyadh Arab summit might provide a mechanism
for restarting the Arab-Israeli peace process.

But the Arab peace initiative got off to a bad start when Saudi
Foreign Minister Saud al-Faisal warned Israel that its rejection of
the plan would leave its fate in the hands of the "lords of war."
Rather than obtaining some flexibility, Israel was handed an
ultimatum.

Moreover, it came as a total surprise when Jim Hoagland disclosed
in the Washington Post that Saudi Arabia´s King Abdullah canceled a
mid-April gala dinner with President George W. Bush at the White
House. If Saudi Arabia has decided to distance itself from the U.S.
at this time, then how could Washington expect that now the time was
ripe for a Saudi-Israeli rapprochement under an American umbrella?
Time Magazine´s Scott MacLeod concluded that the Saudis had left
Rice "stranded."

The real problems with the Saudi peace initiative go well beyond
the much-discussed issue of the "right of return." The Saudi plan
demands "full withdrawal" from "all the territories" Israel captured
40 years ago in the 1967 Six-Day War.

In the past, Israel did not have to pay the price of rhetorically
accepting full withdrawal in order to gain a diplomatic dialogue with
the Arab world. The basis of the 1991 Madrid Peace Conference was UN
Security Council Resolution 242, which appeared in the Madrid
invitation. The Madrid conference also produced a multilateral track
that led to direct diplomatic contacts between Israel and the Gulf
states, including Saudi Arabia. If 242 was sufficient in 1991, why is
it not good enough for 2007?

The Saudis Say "No" to the Bush Administration

During Secretary of State Condoleezza Rice´s last visit to Israel,
she devoted special attention to the revival of the 2002 Saudi-
inspired Arab peace initiative. As a result, expectations had been
elevated that the Riyadh Arab summit might provide a mechanism for
restarting the Arab-Israeli peace process.

Certainly, Israeli diplomats had hoped that a modified peace plan
might be adopted by the Arab heads of state that would leave out any
references to the return of Palestinian refugees to Israel - a non-
starter across the Israeli political spectrum. When that seemed
unlikely, there was increasing speculation that while the formal
initiative would remain unchanged, then at least some other
statements would be made separately that would try to reach out to
Israeli public opinion and build mutual confidence.

But the Arab peace initiative got off to a bad start when Saudi
Foreign Minister Saud al-Faisal warned Israel that its rejection of
the plan would leave its fate in the hands of the "lords of war."
Rather than obtaining some flexibility, Israel was handed an
ultimatum.

This was not the style of either President Anwar Sadat or King
Hussein, but rather a grossly mismanaged way of launching any modus
vivendi with Israel.

Moreover, if Israel thought Rice´s optimistic diplomacy was based on
some well-established U.S.-Saudi coordination, it came as a total
surprise when Jim Hoagland disclosed in the Washington Post that
Saudi Arabia´s King Abdullah canceled a mid-April gala dinner with
President George W. Bush at the White House.1 During the Riyadh
summit meeting itself, Abdullah launched into strong anti-American
rhetoric as he addressed the Arab heads of state, branding the U.S.
presence in Iraq as "an illegitimate foreign occupation."

Saudi Arabia appeared to be signaling a clear shift in its policy
towards Washington. Hoagland heard from administration sources that
Riyadh had decided for now to seek common ground with Iran, Hamas,
and Hizbullah. It now becomes understandable why the Saudis chose to
strengthen Hamas, with the Mecca Agreement, at the expense of Mahmoud
Abbas, who just became politically even more sidelined.

If Saudi Arabia has decided to distance itself from the U.S. at this
time, then how could Washington expect that now the time was ripe for
a Saudi-Israeli rapprochement under an American umbrella? Time
Magazine´s Scott MacLeod concluded that the Saudis had left
Rice "stranded."2

The last time the Saudi initiative was discussed during the 2002 Arab
summit in Beirut, Hamas attacked the Park Hotel in Netanya during the
first night of Passover, killing 29 Israelis and wounding over 150.
At that time, Saudi Arabia did not signal to Israel that it was
serious about peace by cutting back its financial support of Hamas;
in fact, it grew to over 50 percent of Hamas´ total income in 2003.

Moreover, the Saudis did not approach Israel directly, but chose to
launch their initiative through the columns of Thomas Friedman in the
New York Times. The medium was the message. The key figure making the
press contacts for the Saudis was Adel al-Jubeir, who had been sent
to Washington to coordinate the Saudis´ efforts to improve their
declining image in America. It was apparent that the Saudi initiative
was not directed towards Israel, but rather to post-9/11 American
public opinion, which had been shocked to learn that 15 of the 19
hijackers that attacked New York and Washington were Saudi citizens.

The Saudi Price of Full Withdrawal - What About the Bush Letter?

The real problems with the Saudi peace initiative go well beyond the
much-discussed issue of the "right of return." The Saudi plan
demands "full withdrawal" from "all the territories" Israel captured
40 years ago in the 1967 Six-Day War, thus negating the territorial
flexibility contained in UN Security Council Resolution 242 that
intentionally did not use this limiting language.

Adopting the Saudi plan as presented would clearly lead to the re-
division of Jerusalem. It would also strip Israel of the "defensible
borders" that President Bush said was Israel´s right in his April
2004 letter to Prime Minister Ariel Sharon. In 2007, with al-Qaeda
jihadism pouring out of western Iraq and Iran and on the ascendancy
across the region, Bush´s security assurances have only grown in
importance.

The assurances contained in the Bush letter are critical for Israel
and had constituted the main quid pro quo that Israel had gained for
the Gaza disengagement. Yet now the letter seems to have been
forgotten. Indeed, there was a glaring contradiction between the Bush
administration´s new embrace of the Saudi initiative and the written
assurances it gave Sharon only three years ago.

It should be stated that in the past, Israel did not have to pay the
price of rhetorically accepting full withdrawal in order to gain a
diplomatic dialogue with the Arab world. The basis of the 1991 Madrid
Peace Conference was UN Security Council Resolution 242, which
appeared in the Madrid invitation. The Madrid conference also
produced a multilateral track that led to direct diplomatic contacts
between Israel and the Gulf states, including Saudi Arabia. If 242
was sufficient in 1991, why is it not good enough for 2007?

Even the peace that the Saudi initiative presents in exchange for
full withdrawal is not what it might seem to be to the uninitiated.
It promises "normal relations" with Israel, a Syrian diplomatic term
from the 1990s which was intended to be a watered-down alternative to
the European-style peace implied by the term "normalization"
(tatbiyan in Arabic). Nonetheless, the Saudi initiative came to be
known as a grand bargain between Israel and the Arab world: full
withdrawal for full peace with the Arab world as a whole, even if
there are serious questions as to whether that was the Saudis´ real
intent.

Saudi Arabia´s Priorities: Containing Iran, Not Peace

Today, as in 2002, peace with Israel is not likely to be at the top
of the Saudi agenda. The paramount problem of Saudi Arabia is not the
Israeli-Palestinian conflict, despite King Abdullah´s strong
ideological identification with the Palestinian cause in the past.
What is shaping Saudi Arabia´s new diplomatic activism is the rapidly
expanding Iranian threat and the weakness of the Western response.

President Mahmoud Ahmadinejad had committed himself to a second
Iranian revolution: that means a revival of Iranian efforts to export
revolutionary Shiism, wherever possible. In some Sunni-dominated
countries, like Sudan and Syria, the Iranians hope to convert Sunnis
to Shiism. In the Gulf, there are already substantial Shiite
populations. Indeed, Saudi Arabia´s main vulnerability is in its oil-
rich Eastern Province, which has nearly a majority of Shiites.

Neighboring Bahrain, now connected to Saudi Arabia by a bridge, has
an 80 percent Shiite majority.

The potential for revolutionary subversion is enormous. In 1979 and
1980, revolutionary Iran backed Shiite uprisings in Saudi Arabia´s
Eastern Province. According to U.S. court documents, the 1996 attack
on Khobar Towers in eastern Saudi Arabia was conducted by Hizbullah
al-Hijaz, a Shiite terrorist group under the direct control of
Iranian officials.

What can the West do? It needs to assure its Gulf allies by being
more assertive about countering Iranian power. Rice´s instincts to
seize the moment of a shared threat that both Israel and the Sunni
Arab states perceive are essentially correct, but must be directed in
totally different channels.

When Saudi Arabia is facing its own Sunni Islamist threat from within
and a Shiite threat from without, it is not surprising that the last
thing it needs are planeloads of Israeli negotiators and journalists
in Riyadh. And with Hamas in power among the Palestinians and
building its military strength daily in Gaza, Israel does not need to
experiment with new withdrawals. Under such circumstances, quiet
contacts between Israel and its neighbors make far more sense than
grandiose public diplomacy. In peacemaking, timing is everything.

An Alternative Approach

What would those quiet contacts involve? First, finding ways of
building on those Palestinians who are ready to distance themselves
from Iran. And if no Palestinian leadership emerges, encouraging
Egypt and Jordan to take a more constructive role in eliminating the
present chaos by helping counter the growth of terrorist armies that
are in the territories.

At present, there are no indications that anything like this is
happening. But if Saudi Arabia seeks to present itself as a
constructive force, it must use its political and financial clout
behind the scenes to neutralize those groups seeking to undermine the
stability of the Middle East. Only then will it be possible to
explore building the foundations of a regional peace.

Right now, however, Saudi Arabia´s priority is re-establishing a
minimal Arab consensus for dealing with the Iranian challenge in the
future. The Saudis want to draw Hamas into that consensus - and not
build up anyone who is more moderate to confront Hamas and then set
the stage for renewed peace negotiations. As long as dealing with
Iran is far more important for Saudi Arabia than Arab-Israeli
peacemaking, Washington should not be surprised by the outcome of
Arab summit conferences.